Good Glamm Group puts companies on sale to stay afloat
Backed by Warburg Pincus, beauty and personal care brand conglomerate The Good Glamm Group (GGG) is reportedly looking to sell three of its companies. The move comes as the firm grapples with financial woes and looks to raise funds for its operations. Organic Harvest, The Moms Co, and Sirona are some of the brands being considered for sale, people familiar with the matter told Moneycontrol.
GGG's CEO in talks with potential buyers
Darpan Sanghvi, the founder and CEO of GGG, has been in talks with potential buyers. He has met Varun Alagh, co-founder and CEO of Mamaearth in Delhi; Manish Taneja, co-founder and chief executive of Purplle in Mumbai; and senior executives from beauty retailer Nykaa. The meetings were held to explore either the sale of a single brand or multiple brands from GGG's portfolio to these firms.
Sale of individual brands and pricing challenges
An anonymous source privy to the negotiations told Moneycontrol that GGG can't sell all of its 10-12 brands to one buyer. Instead, individual brands have to be sold separately to different companies. Sirona is the most promising brand as it is closest to EBITDA profitability. However, Sanghvi's asking price of ₹500-550 crore for Sirona is too high for some parties involved in the discussions.
GGG's strategy and financial situation
Meanwhile, a second person involved in the negotiations slammed GGG's strategy, saying that selling three to four of its best companies to raise money doesn't make sense. They said that once a company sells its most valuable assets, it can't use the capital to run other brands which haven't been able to scale. Despite these criticisms, GGG has denied these developments in response to queries.
Response and performance
Responding to Moneycontrol's queries, a company spokesperson said the group has heavily invested in closing its pending acquisitions over the last few months. The group had also received interest from financial investors for investments in the parent company and from a few strategic buyers for investments in some of their brands individually. Despite these claims, GGG's monthly sales have reportedly halved from ₹50-60 crore to ₹25-30 crore now as most of its brands struggle to scale in size.
GGG's struggles and future plans
GGG has been struggling financially, with its monthly cash burn rate slashed to about ₹12-15 crore from a high of ₹25-30 crore. The company had recently raised another $30 million at a flat valuation of $1.26 billion from existing investors, including Warburg Pincus, Accel, Bessemer Venture Partners, and Prosus, to repay debt and fund growth plans. This was the company's first large check in months as it struggled to scale.
Bessemer Venture Partners, istory and recent acquisitions
The individual companies under GGG were founded way back in 2015, but the group itself was formed in 2021. Since then, the group has acquired a dozen brands including ScoopWhoop and St. Botanica among others. Over nine years, GGG has raised about $400 million from big investors such as Amazon, Accel, Prosus Ventures, Bessemer Venture Partners, Warburg Pincus who valued the company at $1.26 billion.
